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Russia likely to lose Iraqi oil contracts: US official

AFP, Moscow
A senior US defense adviser suggested in an interview published Monday in Moscow that Russia was likely to lose rights to Iraqi oil contracts signed under the Saddam Hussein regime.
"There is a high probability that all previous deals with Russia will be declared meaningless," Richard Perle, counselor to Defense Secretary Donald Rumsfeld, said in an interview with the Kommersant business daily.
"Of course this is something for the new Iraqi government to decide," Perle said in an interview published in Russian.
"But I would be surprised if Russia wins the support of the new Iraqi leadership -- the same support that it received from (Saddam) Hussein," he said.
The comments threatened to undermine already testy relations between Moscow and Washington amid efforts from both sides to ease the tensions ahead of a meeting between US
President George W. Bush and Russian President Vladimir Putin next month.
Russia has vowed to defend its oil interests in Iraq, through international courts if necessary.
Its leading private oil company LUKoil holds a 68.5-per cent share in a consortium to develop the West Qurna-2 field with the Iraqi energy ministry and two other Russian companies under an agreement signed in 1997.
LUKoil was to invest some four billion dollars in the site's development by 2020 under the deal. But the company was unable to exploit the site due to existing UN oil embargoes on Baghdad.
The company estimated the site has oil reserves of some 20 billion barrels.
Washington officials have said that Iraqi oil must be used to benefit "the Iraqi people" -- the remark, implying a US decision-making role, drew concern in Moscow -- but have so far failed to specify the future of Iraqi oil fields which are now guarded by US troops.
Russia has stepped up its defense of
Iraqi oil rights through diplomats in the foreign ministry as well.
An unnamed diplomat told the IRAR-TASS news agency that Russia wants the UN inspectors to pronounce Iraq free of weapons of mass destruction before economic sanctions against it are lifted.
The unnamed official said UN weapons and nuclear arms inspectors must "return to Iraq and confirm that it has no weapons."
The UN Security Council -- where Russia wields veto power -- must approve the removal of Iraqi sanctions, including those concerning its oil exports.
The Russian official said United States "want the sanctions to be lifted immediately ... but this stance contradicts international rights."
US President George W. Bush said last week he would soon propose a UN resolution ending the economic sanctions that put an embargo on the trade of Iraqi oil.